Investors with a conservative mindset looking for stable current income would do well to consider utilities funds. They are used as defensive instruments, which protect investments during a market downturn. This is because the demand for essential services such as those provided by utilities remains unchanged even during difficult times.

In recent years, many funds in this category have increased their exposure to emerging markets and unregulated companies. Though this strategy has increased the risk involved, it has also led to higher returns. Funds from this category have also benefited from the widespread economic slowdown globally and stock market volatility.

Thus, investing in utilities mutual funds seems prudent as of now. However, choosing the right mutual funds for your portfolio can become cumbersome. To that end, let us find out which of the two funds discussed below is better.

Virtus AllianzGI Water Fund Class A (AWTAX Quick QuoteAWTAX - Free Report)

This fund seeks appreciation of capital in the long run and aims to achieve this by investing the lion’s share of its assets in common stocks and other equity securities of companies that are a part of one or more of the S&P Global Water Index, the NASDAQ OMX US Water or Global Water Indices or the S-Network Global Water Index (Composite), or are engaged in water-related activities.

This Sector - Utilities product has a history of positive total returns for over 10 years.  Specifically, the fund’s returns are 16.7% over the 1-year and 10.7% of the 3-year period. To see how this fund performed compared to its category, and other #1 and 2 Ranked Mutual Funds, please click here.

Meanhwile, as of the last filing, American Water Works and Danaher Corp were the top holdings for Virtus AllianzGI Water Fund Class A.

This Zacks Mutual Fund Rank #1 (Strong Buy) was incepted in April 2008 and is managed by Allianz. AWTAX carries an expense ratio of 1.22% and requires a minimum initial investment of $1,000.

Cohen & Steers Global Infrastructure Fund, Inc. Class A (CSUAX Quick QuoteCSUAX - Free Report)

The fund aims for total return. It invests the lion’s share of its total assets in domestic as well as foreign common stocks and other equity securities that are issued by infrastructure companies, which consist of utilities, pipelines, toll roads, airports, railroads, marine ports, telecommunications companies and other infrastructure companies.

This Sector - Utilities product has a history of positive total returns for over 10 years.  Specifically, the fund’s returns are 4.4% over the 3-year and 7.8% of the 5-year period. To see how this fund performed compared to its category, and other #1 and #2 Ranked Mutual Funds, please click here.   

Meanwhile, as of the last filing, Nextera Energy Inc. and Transurban Group were the top holdings of Cohen & Steers Global Infrastructure Fund, Inc. Class A.

This Zacks Mutual Fund Rank #1 (Strong Buy) fund was incepted in May 2004 and is managed by Cohen & Steers. CSUAX carries an expense ratio of 1.29% and requires a minimum initial investment of $0.

To Conclude

While both AWTAX and CSUAX are buy-rated funds, upon having a closer look we find that AWTAX is a clear winner. Not only are AWTAX’s operating and administrative expenses slightly lower compared CSUAX, AWTAX also has a history of providing higher returns. Therefore, taking into consideration all the factors, AWTAX should be on your radar as it has a history of providing better returns at marginally lower costs, despite being slightly riskier.

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